Law:

Section:

Section 109 of the Income-tax Act, 1961 (Corresponding to Section 23-A, Explanation 2(i) of the Indian Income-tax Act, 1922) - Investment company - Assessment years 1957-58, 1959-60 to 1961-62 - Whether where a company has more than one business activity and one of its activities is more substantial than others, unless that activity is primary activity of company, it cannot be said that company is engaged in 'wholly or mainly' in any one of its business activity - Held, yes - Whether business of 'holding of investments' refers to real, substantial and systematic or orgainsed course of activity of investment carried on by an assessee for a set purpose such as earning profits but when a person invests in shares of some of companies, it is difficult to say that his business is one of investing - Held, yes - Assessee's memorandum of association empowered it to acquire and hold shares, stocks, debentures, etc of any company constituted or carrying on business in British India and to take part in formation, management, supervision or control of business or operation of any company and to carry on any or all of businesses of agents, chief agents or Licensed agents of any company - During relevant period it was managing agents of two other companies - It held shares of those companies as its investments - Tribunal found that managed company's shares were acquired by assessee for purpose of safeguarding its managing agency business - Whether investments made by assessee-company in shares of managed-companies were essentially linked with its managing agency and not with dealing of that company in shares of other companies - Held, yes - Whether since total income of assessee from dividend income of shares of managed companies and managing agency commission was much more than income earned by assessee-company from its share dealings, it could not be said that in relevant previous years assessee-company's business 'consisted wholly or mainly' in dealing in or holding of investment' - Held, yes - Whether taking into consideration value of managing agencies held by assessee-company, it could not be said that assets of company, used in its share dealings were more than its…

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